Government’s draft Bill to reform council rating system is a mixed bag

EXPERT INSIGHT

Minister for Local Government, Hon Shelly Hancock MLA, has released a draft Bill for public consultation to implement reforms to the rating system for councils and ratepayers.

The draft bill contains a mechanism to allow councils to seek rate rises in response to population growth. This is supported.

The new mechanism will incentivise councils to accept additional growth and increased density and give local government the ability to respond to increasing expectations for its role as a community service provider.

The draft Bill, if made, will also allow councils to levy special rates above the rate peg for infrastructure jointly funded with other levels of government without IPART approval. This is also supported as it will allow for the efficient sharing of the cost of infrastructure delivery when the benefits extend beyond a precinct, suburb or council area.

The current rate pegging system has meant that Councils with growing populations have been strapped for cash and have progressively pushed more and more costs onto developers and new home buyers. These additional costs are passed onto new home buyers – often those young people who can least afford the extra costs.

Mr Forrest said he was disappointed some of the of the additional proposals in the draft bill appeared to run counter to affordability outcomes. Limiting postponement of rates on rezoned land and charging rates on land that is required to be protected under conservation agreements is likely to add to the risk and costs of delivering new homes and jobs in NSW.

Urban Taskforce will analyse the contents of the draft Bill over the coming weeks. We will likely urge the Government to reconsider some aspects of the draft Bill to avoid disincentivising investment in property and employment - the last thing we need during the COVID-19 economic downturn.

Tom Forrest is the CEO at Urban Taskforce Australia